Barbados stands at a
crossroads. Behind lie a few rough years, extending from the
financial crisis that rocked Europe and North America. Yet for
all the tribulations, the island’s economy remains
resilient, and is able to draw on revenues from a remarkably
diverse assortment of fast-growing and increasingly profitable
sectors.

Investment in education
and healthcare has remained high throughout the past five
years, while foreign investors, funds, skilled white-collar
workers and wealthy retirees continue to flock to the island in
search of low levels of corporate and income tax and a
super-high quality of life. New legislation, set to become law
in the near future, will allow individuals with more than $5
million in bankable assets to become permanent, property-owning
Barbados residents.

Switzerland with
beachesLook around the island and you see an extraordinarily
diverse and robust economy, as stable and organized and orderly
as any leading first-world financial economy, like Switzerland
with beaches, or Singapore without the humidity.

The roads are filled on
weekday mornings and evenings with commuters, and restaurants
and bars are packed in high season, when it’s hard
to get a room in high-end hotels like Sandy Lane, Little Arches
or the exquisite Colony Club.

All of which aids the
growth and sustainability of probably the region’s
most diverse, stable and robust sovereign state. Despite
shrinking 4% in 2009 as the world gasped for air, Barbadian
gross domestic product returned to growth the following year.
DeLisle Worrell, governor of the Central Bank of Barbados, tips
the economy to grow at a sustainable, long-term annual rate of
around 3%. The island’s recent economic
performance, he says, is "commendable" given the headwinds it
has faced, particularly in the markets for tourism and traded
services.

Euromoney Country Risk
(ECR) data underscore how successful the island has been in
adapting to recent challenges. Barbados’s overall
ECR ranking has consistently outperformed the region in recent
years, rising from 36.9 points in September 2010 –
which marked the first edition of the global database
– to 47.53 points in December 2013, a rise of 42
notches, to 73rd place, in barely three years.

Barbados ranked first
region-wide in terms of its regulatory and policy environment
in December 2013, and places second across a key range of
issues, thanks to low levels of corruption, political risk and
institutional risk, and an enduringly high level of government
stability. In terms of access to capital and debt indicators,
the latter denoting the island’s manageable debt
burden, Barbados ranks second across the Caribbean.

Reasons to be
cheerfulWherever you look, there are reasons for economic
optimism. Barbados placed 47th in the World Economic
Forum’s 2013-14 Global Competitiveness Report, the
highest sovereign score in the Caribbean, beating the larger
economies of Trinidad and Jamaica into 92nd and 94th place,
respectively. Barbados cemented its status as the
region’s best-run and best-managed economy in the
WEF’s report, outperforming average pan-Caribbean
scores across a host of metrics, including innovation,
infrastructure, healthcare, education, labour market efficiency
and technological readiness.

Looking further afield,
Euromoney’s ratings show economists ranking
Barbados alongside Mauritius (rated Baa1 by
Moody’s), another vibrant offshore economy with a
similar business model. Barbados also has a higher ECR ranking
than Azerbaijan, also considered investment grade by
Moody’s, suggesting that economists retain a much
more positive view of the country than the agencies
suggest.

Nor is this a static
economy, reliant on squeezing value out of a few
tried-and-tested industries. In a December 2013 report, the
island’s central bank noted that
Barbados’s ongoing recovery stemmed firmly from
rising investment and activity in the private sector.
Investment capital continues to flow into the business-friendly
island, which boasts an average corporate tax rate as low as
1.6% for international business and services companies.

Agribusiness remains a
serious business: Barbados is home to great global names in the
rum trade, like Mount Gay and Cockspur. Green energy output is
growing fast: solar power will make up around 10% of the
island’s electricity output by 2018, notes
Worrell. Barbados is also host to a number of rising
green-energy names such as Solar Dynamics and Innogen
Technologies.

And while the island
boasts the sort of global business advisory names
you’d usually find in clusters on Wall Street or
in the City of London – Ernst & Young, KPMG,
Deloitte – it has also succeeded in attracting some
serious names in the specialized consultancy space. A notable
coup came when it convinced Damian McKinney to relocate the
international division of his consultancy, McKinney Rogers,
from southwest UK.

Conduit for
investmentBarbados is the perfect place to find financial and
investment advice. Global corporates and institutional
investors have long parked their money on an island famed for
its low prices and business-friendly tax regime. Barbados is a
sovereign territory to invest both in and through: its
double-tax agreements and bilateral investment treaties make it
the ideal conduit through which to invest capital in countries
with incomplete or troublesome regulatory structures.

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